"In traditional economic theory, as in politics, we Americans are taught to believe that selfishness is next to godliness. We are taught that the market is at its most efficient when individuals act rationally to maximize their own self-interest without regard to the effects on anyone else. We are taught that democracy is at its most functional when individuals and factions pursue their own self-interest aggressively. In both instances, we are taught that an invisible hand converts this relentless clash and competition of self-seekers into a greater good.

These teachings are half right: most people indeed are looking out for themselves. We have no illusions about that. But the teachings are half wrong in that they enshrine a particular, and particularly narrow, notion of what it means to look out for oneself.

Conventional wisdom conflates self-interest and selfishness. It makes sense to be self-interested in the long run. It does not make sense to be reflexively selfish in every transaction. And that, unfortunately, is what market fundamentalism and libertarian politics promote: a brand of selfishness that is profoundly against our actual interest. …

… As social psychologist Dacher Keltner writes in Born to Be Good, humans could not have survived and evolved without the social organization that only cooperation, mutuality, and reciprocity make possible. In fact, we are so tilted toward cooperation that we punish non-cooperators in our communities, even at cost to ourselves. This “strong reciprocation” strategy reflects a deep recognition, made instinctual through millennia of group activity, that all behavior is contagious, and that rewarding good with good and bad with punishment is the best way to protect our societies and therefore ourselves. Reciprocity makes compassion not a form of weakness but a model of strength; it makes pro-social morality not just moral but natural and smart. …

… A fundamental assumption of traditional economics is that competitiveness creates prosperity. This view, descended from a misreading of Adam Smith and Charles Darwin, weds the invisible hand of the market to the natural selection of nature. It justifies atomistic self-seeking. A clearer understanding of how evolutionary forces work in complex adaptive human society shows that cooperation is the true foundation of prosperity (as does a full reading Adam Smith’s lesser-known masterpiece A Theory of Moral Sentiments). Competition properly understood—in nature or in business—is between groups of cooperators. Groups that know how to cooperate—whose members attend to social and emotional skills like empathy—defeat those that do not. That’s because only cooperation can create symbiotic, nonzero outcomes. And those nonzero outcomes, borne and propelled by ever-increasing trust and cooperation, create a feedback loop of ever-increasing economic growth and social health. …

… Let’s be clear here: we are not talking about a sudden embrace of saintly self-denial. We are talking about humans correcting their vision—as they did when they recognized that the sun didn’t orbit the earth; as they did when they acknowledged that germs, not humours, caused sickness. We are talking about humans seeing, with long-overdue clarity, and with all our millennia of self-preservation instincts intact, a simple truth: True self-interest is mutual interest. The best way to improve your likelihood of surviving and thriving is to make sure those around you survive and thrive. Notwithstanding American mythology about selfishness making the world go round, humans have in fact evolved—have been selected—to look out for others in their group and, in so doing, to look out for self. We exist today because this is how our ancestors behaved. We evolve today by ensuring that our definition of “our group” is wide enough to take advantage of diversity and narrow enough to be actionable.

This is a story, in short, about self-interest that is smart, or “self-interest properly understood,” as Tocqueville put it. It is a true story. It tells of neither altruism nor raw simple selfishness. Altruism is admirable, but not common enough to support a durable moral or political system. Raw Selfishness may seem like the savvy stance, but is in fact self-defeating: tragedies of the commons are so called because they kill first the commons and then the people. True self-interest is mutual interest. This is even more urgently true in the age of global climate change, terror, drugs, pop culture, marketing, and so forth than it was in the age of hunter-gatherers. …